Gale, et al v. CitiMortgage, Inc., et al

Filing 94

ORDER Denying 68 Plaintiff's Motion for Partial Summary Judgment. IT IS FURTHER ORDERED that 85 Nationstar and Fannie Mae's Motion for Summary Judgment is GRANTED in part and DENIED in part. IT IS FURTHER ORDERED that 89 CitiMortg age's Motion to Dismiss is converted to a motion for summary judgment and GRANTED. CitiMortgage is granted summary judgment on all of Plaintiff's claims against it. The Clerk shall enter judgment accordingly. Signed by Chief Judge Gloria M. Navarro on 8/20/2014. (Copies have been distributed pursuant to the NEF - EDS)

1

UNITED STATES DISTRICT COURT

2

DISTRICT OF NEVADA

3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

ANDREA B. GALE, an individual, and as
Trustee of Andrea Beryl Gale Revocable
Living Trust,

)
)
)
)
Plaintiff,
)
vs.
)
)
CITIMORTGAGE, INC.; NATIONSTAR
)
MORTGAGE, LLC; CAL-WESTERN
)
RECONVEYANCE CORPORATION;
)
QUALITY LOAN SERVICE as trustee, and )
DOES 1 through 10, and ROE
)
CORPORATIONS 1 through 10, inclusive,
)
)
Defendants.
)
______________________________________ )
)
FEDERAL NATIONAL MORTGAGE
)
ASSOCIATION,
)
)
Indispensable Party.
)
)

Case No.: 2:12-cv-02065-GMN-VCF
ORDER

Pending before the Court is the Motion for Partial Summary Judgment (ECF No. 68)

18

filed by Plaintiff Andrea B. Gale (“Plaintiff”) on November 26, 2013. On December 13, 2013,

19

Defendant CitiMortgage, Inc. (“CitiMortgage”) filed its Response (ECF No. 72) and its

20

Objection to Evidence (ECF No. 76) relied upon by Plaintiff in her motion. Defendant

21

Nationstar Mortgage LLC (“Nationstar”) and Indispensable Party Federal National Mortgage

22

Association (“Fannie Mae”) filed their Response (ECF No. 77) on December 20, 2013.

23

Plaintiff filed an untimely Reply (ECF No. 82) on January 9, 2014.

24
25

Page 1 of 20

1

Also before the Court is the Motion for Summary Judgment (ECF No. 85) filed by

2

Nationstar and Fannie Mae on March 18, 2014. Plaintiff filed her Response (ECF No. 87) on

3

April 14, 2014.

4

The final motion before the Court is the Motion to Dismiss (ECF No. 89) filed by

5

CitiMortgage on May 29, 2014. Plaintiff filed a Response (ECF No. 91) on June 20, 2014, and

6

CitiMortgage filed its Reply (ECF No. 93) on July 1, 2014.

7

I.

8
9

BACKGROUND
On November 29, 2006, Plaintiff entered into a loan agreement with National Bank of

Kansas City for a $216,315 loan secured by a Deed of Trust on property located at 251 S.

10

Green Valley Parkway #714, Henderson, Nevada 89012 (the “Property”). (Deed of Trust, Ex. 1

11

to Am. Complaint, ECF No. 1-4.) Plaintiff defaulted on her obligation under the Deed of Trust

12

when she failed to make the monthly payment due on June 1, 2009. (2010 Notice of Default,

13

Ex. 3 to Am. Complaint, ECF No. 1-4.) On November 1, 2009, CitiMortgage, who serviced

14

the loan for the original lender,1 entered into a Home Affordable Modification Trial Period Plan

15

with Plaintiff whereby Plaintiff would make monthly payments of $838.75 for one year, and if

16

Plaintiff successfully completed the plan, the parties would enter into a permanent Loan

17

Modification Agreement (“LMA”). (Trial Period Plan, Ex. 2 to Am. Complaint, ECF No. 1-4.)

18

Plaintiff appears to have successfully made all her required payments under the Trial

19

Period Plan because on October 22, 2010, Plaintiff entered into a LMA with CitiMortgage.

20

(LMA, Ex. 1 to Pl.’s MPSJ, ECF No. 68.) Under the LMA, $47,338.46 of the $245,095.46 that

21

remained outstanding on the loan was deferred and Plaintiff was obligated to begin making

22

monthly payments of $840.662 beginning on December 1, 2010. (Id.) The LMA also “forever

23
24

1

The original lender eventually assigned the Deed of Trust to CitiMortgage on July 29, 2010. (First Assignment
of Deed of Trust, ECF No. 77-2.)

25

The LMA states that the $840.66 monthly payments “[m]ay adjust periodically.” (LMA, Ex. 1 to Pl.’s MPSJ,
ECF No. 68.)
2

Page 2 of 20

1

canceled” several terms in the Deed of Trust, including a term requiring that “[a]ll costs and

2

expenses incurred by Lender in connection with this Agreement, including … attorney’s fees,

3

shall be paid by the Borrower.” (Id. ¶ 6.) Plaintiff, however, never made a single payment

4

under the LMA. (Nationstar MSJ 4:8, ECF No. 77.)

5

In November of 2010, CitiMortgage transferred the servicing of the loan to Nationstar.

6

(Pl.’s MPSJ 6:15-17, ECF No. 68); (Nationstar MSJ 2:21, ECF No. 77.) Following the transfer

7

and Plaintiff’s failure to make her first payment on December 1, 2010, Nationstar sent Plaintiff

8

two letters, one dated January 7, 2011 and one dated January 15, 2011, erroneously stating that

9

her loan was past due in the amount of $47,829.40.3 (Demand Letters, Ex. 2 to Pl.’s MPSJ,

10

ECF No. 68.) However, Plaintiff also received monthly billing statements from Nationstar

11

indicating that her amounts due each month were $852.37. (Billing Statements, Ex. 3 to Pl.’s

12

MPSJ, ECF No. 68.) Plaintiff’s first billing statement for her December 1, 2010 payment,

13

which is dated November 22, 2010, shows an amount due of $852.37 and indicates a deferred

14

principal amount of $47,838.46. (Id.) After Plaintiff failed to make her December 1, 2010

15

payment, the billing statements she received in the following months also contained a charge of

16

$2,048.18 for “legal fees” in addition to her current monthly and past due payments. (Id.)

17

The parties are in some dispute over the exact sequence and level of correspondence

18

between them over the next few months. However, it is not disputed that from January to

19

August Nationstar continued to send billing statements to Plaintiff indicating that $47,838.46 of

20

the loan’s principal was deferred and that Plaintiff owed monthly payments of $852.37 while it

21

simultaneously sent her conflicting demand letters indicating that her loan was past due in

22

amounts that appeared to include the deferred principal. (Billing Statements, Ex. 3 to Pl.’s

23
24
3

25

In her motion, Plaintiff states that she received two initial demand letters in November 2010 and December
2010 respectively, and in its motion, Nationstar states that it sent demand letters in December 2010 and January
2011. (Pl.’s MPSJ 6:17-21, ECF No. 68); (Nationstar MSJ 2:22-24, ECF No. 77.) However, both motions cite to
the January letters attached to Plaintiff’s motion when making these statements.

Page 3 of 20

1

MPSJ, ECF No. 68); (Demand Letters, Ex. 2 to Pl.’s MPSJ, ECF No. 68.) Additionally, on

2

multiple occasions throughout those months, Plaintiff spoke with agents of Nationstar

3

concerning her loan and was informed that the demand letters were incorrect and that Plaintiff

4

only owed $852.37 for each month’s payment.4 (Pl.’s MPSJ 7:5-7, ECF No. 68); (Nationstar

5

MSJ 3:1-8, 3:21-4:3, ECF No. 77); (Servicing Records, Ex. 4 to Pl.’s MPSJ, ECF No. 68.) In

6

fact, Plaintiff admits that after she received the initial demand letters stating an incorrect

7

amount due, she “contacted Nationstar immediately and informed them that [the] payment

8

amount was in error. Nationstar agreed … and stated that it would correct the problem.” (Aff.

9

of Pl. ¶ 6, Pl.’s MPSJ, ECF No. 68.) Despite these communications, however, Plaintiff

10

continued to receive demand letters with the incorrect amount through August of 2011.

11

(Demand Letters, Ex. 2 to Pl.’s MPSJ, ECF No. 68.) She also continued to refuse to pay any

12

amount on the loan. (Nationstar MSJ 3:23-24, 4:8, ECF No. 77.)
Eventually, on July 8, 2011, Defendant Quality Loan Service Corporation (“Quality

13
14

Loan”), as trustee for Nationstar entered a Notice of Breach and Default. (2011 Notice of

15

Breach, ECF No. 85-6.) Later, on June 17, 2012, Quality Loan entered a Notice of Trustee’s

16

Sale. (Notice of Trustee’s Sale, ECF No. 85-7.) Subsequently, the Property was sold to Fannie

17

Mae at a trustee’s sale on August 3, 2012. (Trustee’s Deed upon Sale, ECF No. 85-8.)

18

Plaintiff initially filed this action in Nevada state court on October 18, 2012, requesting

19

declaratory relief and money damages and seeking to enjoin Defendants from “causing further

20

damage to Plaintiff’s title, commencing statutorily defective foreclosures, or preventing her

21

from receiving the benefits that were guaranteed to her under the terms of the LMA.” (Id. ¶ 85.)

22
23
24
25

4

Plaintiff also began communicating with someone in the office of Congressman Joe Heck who spoke with
Plaintiff and representatives from Nationstar on multiple occasions in an attempt to resolve the confusion over
the amount due. (Pl.’s MPSJ 7:8-10, ECF No. 68); (Nationstar MSJ 3:16-20, ECF No. 77); (Servicing Records,
Ex. 4 to Pl.’s MPSJ, ECF No. 68.)

Page 4 of 20

1

On December 4, 2012, Quality Loan5 removed the action to this Court. (Notice of Removal,

2

ECF No. 1.) After a hearing and several rounds of briefing, the Court ultimately denied

3

Plaintiff’s request for a preliminary injunction. (Order, ECF No. 45.) Following the Ninth

4

Circuit’s affirmance of the denial for a preliminary injunction on appeal (ECF No. 62), the

5

parties filed the current pending motions.

6

II.

7

A. Motion for Summary Judgment Standard

8
9

LEGAL STANDARD

The Federal Rules of Civil Procedure provide for summary adjudication when the
pleadings, depositions, answers to interrogatories, and admissions on file, together with the

10

affidavits, if any, show that “there is no genuine dispute as to any material fact and the movant

11

is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). Material facts are those that

12

may affect the outcome of the case. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248

13

(1986). A dispute as to a material fact is genuine if there is sufficient evidence for a reasonable

14

jury to return a verdict for the nonmoving party. See id. “Summary judgment is inappropriate if

15

reasonable jurors, drawing all inferences in favor of the nonmoving party, could return a verdict

16

in the nonmoving party’s favor.” Diaz v. Eagle Produce Ltd. P’ship, 521 F.3d 1201, 1207 (9th

17

Cir. 2008) (citing United States v. Shumway, 199 F.3d 1093, 1103–04 (9th Cir. 1999)). A

18

principal purpose of summary judgment is “to isolate and dispose of factually unsupported

19

claims.” Celotex Corp. v. Catrett, 477 U.S. 317, 323-24 (1986).
In determining summary judgment, a court applies a burden-shifting analysis. “When

20
21

the party moving for summary judgment would bear the burden of proof at trial, it must come

22

forward with evidence which would entitle it to a directed verdict if the evidence went

23

uncontroverted at trial. In such a case, the moving party has the initial burden of establishing

24
25
5

Quality Loan has since been dismissed as a Defendant from this case by stipulation. (Order on Stip., ECF No.
70.)

Page 5 of 20

1

the absence of a genuine issue of fact on each issue material to its case.” C.A.R. Transp.

2

Brokerage Co. v. Darden Rests., Inc., 213 F.3d 474, 480 (9th Cir. 2000) (citations omitted). In

3

contrast, when the nonmoving party bears the burden of proving the claim or defense, the

4

moving party can meet its burden in two ways: (1) by presenting evidence to negate an

5

essential element of the nonmoving party’s case; or (2) by demonstrating that the nonmoving

6

party failed to make a showing sufficient to establish an element essential to that party’s case

7

on which that party will bear the burden of proof at trial. See Celotex Corp., 477 U.S. at 323–

8

24. If the moving party fails to meet its initial burden, summary judgment must be denied and

9

the court need not consider the nonmoving party’s evidence. See Adickes v. S.H. Kress & Co.,

10
11

398 U.S. 144, 159–60 (1970).
If the moving party satisfies its initial burden, the burden then shifts to the opposing

12

party to establish that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v.

13

Zenith Radio Corp., 475 U.S. 574, 586 (1986). To establish the existence of a factual dispute,

14

the opposing party need not establish a material issue of fact conclusively in its favor. It is

15

sufficient that “the claimed factual dispute be shown to require a jury or judge to resolve the

16

parties’ differing versions of the truth at trial.” T.W. Elec. Serv., Inc. v. Pac. Elec. Contractors

17

Ass’n, 809 F.2d 626, 631 (9th Cir. 1987). In other words, the nonmoving party cannot avoid

18

summary judgment by relying solely on conclusory allegations that are unsupported by factual

19

data. See Taylor v. List, 880 F.2d 1040, 1045 (9th Cir. 1989). Instead, the opposition must go

20

beyond the assertions and allegations of the pleadings and set forth specific facts by producing

21

competent evidence that shows a genuine issue for trial. See Celotex Corp., 477 U.S. at 324.

22

At summary judgment, a court’s function is not to weigh the evidence and determine the

23

truth but to determine whether there is a genuine issue for trial. See Anderson, 477 U.S. at 249.

24

The evidence of the nonmovant is “to be believed, and all justifiable inferences are to be drawn

25

Page 6 of 20

1

in his favor.” Id. at 255. But if the evidence of the nonmoving party is merely colorable or is

2

not significantly probative, summary judgment may be granted. See id. at 249–50.

3
4

B. Motion to Dismiss Standard
Rule 12(b)(6) of the Federal Rules of Civil Procedure mandates that a court dismiss a

5

cause of action that fails to state a claim upon which relief can be granted. See North Star Int’l

6

v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). When considering a motion to

7

dismiss under Rule 12(b)(6) for failure to state a claim, dismissal is appropriate only when the

8

complaint does not give the defendant fair notice of a legally cognizable claim and the grounds

9

on which it rests. See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). In considering

10

whether the complaint is sufficient to state a claim, the Court will take all material allegations

11

as true and construe them in the light most favorable to the plaintiff. See NL Indus., Inc. v.

12

Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

13

“Generally, a district court may not consider any material beyond the pleadings in ruling

14

on a Rule 12(b)(6) motion . . . . However, material which is properly submitted as part of the

15

complaint may be considered on a motion to dismiss.” Hal Roach Studios, Inc. v. Richard

16

Feiner & Co., 896 F.2d 1542, 1555 n.19 (9th Cir. 1990) (citations omitted). Similarly,

17

“documents whose contents are alleged in a complaint and whose authenticity no party

18

questions, but which are not physically attached to the pleading, may be considered in ruling on

19

a Rule 12(b)(6) motion to dismiss” without converting the motion to dismiss into a motion for

20

summary judgment. Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994). Under Federal Rule

21

of Evidence 201, a court may take judicial notice of “matters of public record.” Mack v. S. Bay

22

Beer Distrib., 798 F.2d 1279, 1282 (9th Cir. 1986). Otherwise, if the district court considers

23

materials outside of the pleadings, the motion to dismiss is converted into a motion for

24

summary judgment. See FED. R. CIV. P. 12(d); Arpin v. Santa Clara Valley Transp. Agency,

25

261 F.3d 912, 925 (9th Cir. 2001).

Page 7 of 20

1

III.

DISCUSSION
Plaintiff’s Amended Complaint asserts causes of action against various Defendants for

2
3

(1) statutorily defective foreclosure, (2) breach of contract, (3) violation of Nevada Revised

4

Statutes § 205.372, (4) breach of the implied covenant of good faith and fair dealing, (5)

5

intentional interference with contractual relations, (6) fraudulent misrepresentation, and (7)

6

negligence per se. (Am. Complaint, ECF No. 1-4.) In her motion, Plaintiff seeks summary

7

judgment on her claims for breach of contract, breach of the implied covenant of good faith and

8

fair dealing, and intentional interference with contractual relations. (Pl.’s MPSJ 9:2-13:9, ECF

9

No. 68.) In its motion, Nationstar moves for summary judgment on all seven of Plaintiff’s

10

claims against it. (Nationstar MSJ 5:19-10:26, ECF No. 77.) Similarly, in its motion,

11

CitiMortage seeks to dismiss all of Plaintiff’s claims except for intentional interference with

12

contractual relations, which Plaintiff has only alleged against Nationstar.6

13

A. Statutorily Defective Foreclosure

14

Plaintiff alleges that the foreclosure on the Property was defective under the

15

requirements of Nevada Revised Statutes § 107. However, Plaintiff’s claim fails because she

16

did not abide by the requirements of Nevada Revised Statutes § 107.080 in raising her claim.

17

Nevada Revised Statutes § 107.080.5 provides:

18

Every sale made under the provisions of this section and other sections of this chapter
vests in the purchaser the title of the grantor and any successors in interest without
equity or right of redemption. A sale made pursuant to this section must be declared
void by any court of competent jurisdiction in the county where the sale took place if:
(a) The trustee or other person authorized to make the sale does not substantially
comply with the provisions of this section or any applicable provision of NRS
107.086 and 107.087;
(b) Except as otherwise provided in subsection 6, an action is commenced in the
county where the sale took place within 45 days after the date of the sale; and

19
20
21
22
23
24
25

As the Court will consider materials outside the pleadings, CitiMortgage’s Motion to Dismiss shall be treated
like a Motion for Summary Judgment. See FED. R. CIV. P. 12(d); Arpin, 261 F.3d at 925.
6

Page 8 of 20

1

(c) A notice of lis pendens providing notice of the pendency of the action is
recorded in the office of the county recorder of the county where the sale
took place within 15 days after commencement of the action.

2
3
4

NEV. REV. STAT. § 107.080.5 (2013) (emphasis added). In Nevada, “[a] civil action is

5

commenced by filing a complaint with the court.” NEV. R. CIV. P. 3. In 2011, the Nevada

6

legislature amended this subsection to change the words “may be declared void” to “must be

7

declared void.” Act of May 20, 2011, A.B. 284, Ch. 81 § 9, 2011 Nev. Stat. 334.
Here, the sale was conducted on August 3, 2012. (Trustee’s Deed upon Sale, ECF No. 1-

8
9

4.) Plaintiff timely filed her original complaint with the state court on October 18, 2012.

10

(Compl., ECF No. 1-2.) However, Plaintiff did not record the notice of lis pendens with the

11

Clark County Recorder until November 30, 2012. (Recorded Lis Pendens, Ex. C to Supp. Opp.,

12

ECF No. 42-3.) Therefore, because Plaintiff did not record her lis pendens within 30 days of

13

commencing this action, this Court is unable to declare the sale void.7 See Miller v. Wells

14

Fargo Bank, 2:10-CV-363 JCM, 2010 WL 2697082, at *2 (D. Nev. July 6, 2010) (“[T]he

15

plaintiffs were required to record a lis pendens in the county where the sale took place within

16

thirty days of filing their action. Plaintiffs failed to do so. Therefore, this court does not have

17

the statutory authority to void the trustee’s sale.”); Margulis v. Mortgage Elec. Registration

18

Sys., Inc., 2:11-CV-1050-GMN-LRL, 2012 WL 760785, at *6 (D. Nev. Mar. 6, 2012)

19

(“Plaintiff has not filed proof that he recorded a notice of lis pendens within 30 days of the

20

commencement of this action. Thus the Court would be unable to declare the sale void under

21

N.R.S. § 107.080(5).”).
Accordingly, the Court grants Nationstar and CitiMortgage summary judgment on this

22
23

claim.

24
25

7

Plaintiff appears to concede that her claim for statutorily defective foreclosure fails because she does not refute
the arguments of either Nationstar or CitiMortgage on this point in either of her response briefs to their motions.
See (Pl.’s Resp. to Nationstar’s MSJ, ECF No. 87); (Pl.’s Resp. to CitiMortgage’s MTD, ECF No. 91.)

Page 9 of 20

1

B. Breach of Contract

2

A claim for breach of contract must allege (1) the existence of a valid contract; (2) that

3

plaintiff performed or was excused from performance; (3) that the defendant breached the terms

4

of the contract; and (4) that the plaintiff was damaged as a result of the breach. See Restatement

5

(Second) of Contracts § 203 (2007); Calloway v. City of Reno, 993 P.2d 1259, 1263 (Nev.

6

2000) (“A breach of contract may be said to be a material failure of performance of a duty

7

arising under or imposed by agreement”). An enforceable contract requires: (1) an offer and

8

acceptance, (2) meeting of the minds, and (3) consideration. May v. Anderson, 119 P.3d 1254,

9

1257 (Nev. 2005).

10

In her Amended Complaint, Plaintiff asserts that CitiMortgage breached the LMA by

11

selling Plaintiff’s mortgage to Nationstar “less than two weeks after entering into [the] LMA,”

12

and that Nationstar breached the LMA by “demanding a first month’s payment in an amount of

13

$47,829.40.” (Am. Complaint ¶¶ 47-49, ECF No. 1-4.)8 Regarding Plaintiff’s breach of

14

contract claim against CitiMortgage, Plaintiff has failed to sufficiently show how

15

CitiMortgage’s selling of the loan to Nationstar two weeks after its execution constituted a

16

breach of the LMA. (LMA, Ex. 1 to Pl.’s MPSJ, ECF No. 68.) Neither Plaintiff’s Amended

17

Complaint nor any of her briefs point to a provision of the LMA that was allegedly violated or

18

provide any explanation for why this sale is a breach of the agreement. See generally (Am.

19

Complaint, ECF No. 1-4); (Pl.’s MPSJ, ECF No. 68); (Pl.’s Resp. to Nationstar’s MSJ, ECF

20
21
8

22
23
24
25

Plaintiff also asserts in her motion that both Nationstar and CitiMortgage breached the LMA when Nationstar
sought $2,049.18 for “legal fees” in its billing statements. (Pl.’s MPSJ 9:17-10:10, ECF No. 68.) However,
because Plaintiff did not raise this theory in her complaint, she cannot now raise it at the summary judgment
stage. See Pickern v. Pier 1 Imports (U.S.), Inc., 457 F.3d 963, 968-69 (9th Cir. 2006); Coleman v. Quaker Oats
Co., 232 F.3d 1271, 1292-93 (9th Cir. 2000); see also Paxton v. City of Montebello, 712 F. Supp. 2d 1007, 1011
n.8 (C.D. Cal. 2010) (“to the extent plaintiffs seek or contest summary judgment on the ground City did not
promptly reemploy them in violation of USERRA, they cannot do so since they do not raise this issue in their
complaint.”) (internal citations omitted); Torres v. City of Madera, 655 F.Supp.2d 1109, 1128 (E.D. Cal. 2009)
(“If the complaint focuses on one theory of liability, the plaintiff cannot turn around and surprise the defendant at
the summary judgment stage with a new theory of liability.”).

Page 10 of 20

1

No. 87); (Pl.’s Resp. to CitiMortgage’s MTD, ECF No. 91.) More importantly, however, the

2

compliance agreement signed by Plaintiff that accompanied the LMA specifically states that

3

Plaintiff “agrees to fully cooperate with any reasonable requests by [CitiMortgage] … (2) to

4

enable [CitiMortgage] to sell, convey, seek a guaranty or obtain insurance for, or market [the

5

LMA] to any purchaser.” (LMA, Ex. 1 to Pl.’s MPSJ, ECF No. 68.) Therefore, the selling of a

6

loan was expressly permitted under the terms of the LMA and could not be a breach of the

7

agreement. Accordingly, the Court grants CitiMortgage summary judgment on this claim.

8
9

Regarding Plaintiff’s breach of contract claim against Nationstar, Plaintiff has not put
forward sufficient evidence to entitle her to a directed verdict. In order to bring a breach of

10

contract claim, Plaintiff must show that she performed or was excused from performance under

11

the contract. See Calloway, 993 P.2d at 1263. Plaintiff does not dispute that she failed to make

12

any payments under LMA, and thereby failed to perform under the LMA. (Pl.’s Resp. to

13

CitiMortgage’s MTD 7:19-8:10, ECF No. 91.) Instead, Plaintiff argues that Nationstar

14

breached the contract first in sending the inaccurate demand letter, implying that this breach

15

excused her later breach in failing to pay. (Id.) However, while “[a] material breach by one

16

party to a contract may excuse further performance by another party to the contract,” Crockett

17

& Myers, Ltd. v. Napier, Fitzgerald & Kirby, LLP, 440 F. Supp. 2d 1184, 1193 (D. Nev. 2006)

18

(citing Young Elec. Sign Co. v. Fohrman, 466 P.2d 846, 847 (Nev. 1970)), there appears to be a

19

genuine dispute as to whether Plaintiff was in breach before she received the first incorrect

20

demand letter.

21

Plaintiff’s first payment under the LMA was due on December 1, 2010, and Plaintiff

22

asserts that she received the first demand letter in November 2010. (LMA, Ex. 1 to Pl.’s MPSJ,

23

ECF No. 68); (Pl.’s MPSJ 6:17-21, ECF No. 68.) Nationstar, however, states that it sent the

24

first demand letter in December 2010, and neither side has provided a copy of a demand letter

25

dated before January 7, 2011. (Nationstar MSJ 2:22-24, ECF No. 77.) Therefore, whether

Page 11 of 20

1

Plaintiff’s breach in failing to make her December payment occurred after Nationstar’s first

2

inaccurate demand letter is a disputed material fact.

3

Moreover, “[w]hether a party has breached a contract and whether the breach is material

4

are questions of fact.” Las Vegas Sands, LLC v. Nehme, 632 F.3d 526, 536 (9th Cir. 2011)

5

(citing Hoffman v. Eighth Judicial Dist. Court, 523 P.2d 848, 850 (Nev. 1974)); see also

6

Thornton v. Agassiz Const., Inc., 799 P.2d 1106, 1108 (Nev. 1990) (“Materiality is generally a

7

question of fact.”). Neither party has presented any law indicating that a mortgagee’s sending

8

of a letter demanding an “excessive amount” from the mortgagor under the loan agreement

9

does or does not constitute a material breach of the loan agreement as a matter of law.

10

Therefore, there still exist genuine issues of material fact concerning whether Nationstar’s

11

sending of incorrect demand letters constituted material breaches of the LMA that occurred

12

before Plaintiff’s breach for failing to pay.

13
14
15

Accordingly, the Court denies Nationstar and Plaintiff summary judgment on this claim.
C. Violation of Nevada Revised Statutes § 205.372
Nevada Revised Statutes § 205.372 is a criminal statute making mortgage lending fraud

16

a crime in Nevada. Generally, a violation of a criminal statute does not create a private right of

17

action. See Linda R.S. v. Richard D., 410 U.S. 614, 619 (1972) (“a private citizen lacks

18

judicially cognizable interest in the prosecution ... of another.”); see also Josephson v. EMC

19

Mortgage Corp., 2:10-CV-336 JCM PAL, 2010 WL 4810715, at *2 (D. Nev. Nov. 19, 2010)

20

(“[T]hey allege … violations of NRS 205.372 and 205.390. However, as the statutes are

21

criminal statutes, the plaintiffs do not have a private right of action for violations of them.”).

22

Nevada Revised Statutes § 205.372 does not provide for a private cause of action, and instead

23

expressly vests the right to seek criminal or civil penalties under the statute with the state

24

attorney general. See NEV. REV. STAT. § 205.372.6 (“This penalty must be recovered in a civil

25

Page 12 of 20

1

action, brought in the name of the State of Nevada by the Attorney General.”). Therefore,

2

Plaintiff’s claims based on violations of Nevada Revised Statutes § 205.372 must fail.9

3
4

Accordingly, the Court grants Nationstar and CitiMortgage summary judgment on this
claim.

5

D. Breach of the Implied Covenant of Good Faith and Fair Dealing

6

To state a claim of breach of the covenant of good faith and fair dealing, Plaintiff must

7

allege: (1) Plaintiff and Defendants were parties to an agreement; (2) Defendants owed a duty

8

of good faith to the Plaintiff; (3) Defendants breached that duty by performing in a manner that

9

was unfaithful to the purpose of the contract; and (4) Plaintiff’s justified expectations were

10

denied. Perry v. Jordan, 900 P.2d 335, 338 (Nev. 1995). In Nevada, an implied covenant of

11

good faith and fair dealing exists in every contract, Consol. Generator–Nevada v. Cummins

12

Engine Co., Inc., 971 P.2d 1251, 1256 (Nev. 1998), and a plaintiff may assert a claim for its

13

breach if the defendant deliberately contravenes the intention and spirit of the agreement,

14

Morris v. Bank Am. Nev., 886 P.2d 454 (Nev. 1994). The covenant of good faith and fair

15

dealing “only applies after a binding contract is formed.” Crellin Techs., Inc. v. Equipmentlease

16

Corp., 18 F.3d 1, 10 (1st Cir. 1994).

17

In her Amended Complaint, Plaintiff asserts a cause of action for breach of the implied

18

covenant of good faith and fair dealing against both Nationstar and CitiMortgage based solely

19

on Nationstar’s “demanding a payment well in excess of, and in violation of, the terms set forth

20

in the LMA.” (Am. Complaint ¶ 57, ECF No. 1-4.)10 Plaintiff, however, provides no

21
22
9

23

Plaintiff appears to concede that she does not have a private cause of action under the statute because she does
not refute the arguments of either Nationstar or CitiMortgage on this point in either of her response briefs to their
motions. See (Pl.’s Resp. to Nationstar’s MSJ, ECF No. 87); (Pl.’s Resp. to CitiMortgage’s MTD, ECF No. 91.)

24
10

25

Plaintiff also asserts in her motion that CitiMortgage breached the implied covenant of good faith and fair
dealing when Nationstar’s included $2,049.18 for “legal fees” in its billing statements. (Pl.’s MPSJ 11:5-23, ECF
No. 68.) Again, however, because Plaintiff did not raise this theory in her complaint, she cannot now raise it at
the summary judgment stage. See supra note 8, at 10.

Page 13 of 20

1

explanation in her Amended Complaint or her briefs for how Nationstar’s actions in demanding

2

payment in excess of the required amount under the LMA would constitute a breach by

3

CitiMortgage. There is simply nothing in Plaintiff’s Amended Complaint explaining her theory

4

for CitiMortgage’s liability on this claim beyond the conclusory statement that “Defendants

5

unfairly interfered with Plaintiff’s right to receive the benefits of the contract.” (Id.) Therefore,

6

Plaintiff has failed to make a sufficient showing to establish that CitiMortgage breached the

7

implied covenant of good faith and fair dealing when Nationstar sent an incorrect demand

8

letter. Accordingly, the Court grants CitiMortgage summary judgment on this claim.

9

Additionally, to the extent Plaintiff alleges claims against either CitiMortgage or

10

Nationstar for tortious, rather than contractual, breach of the implied covenant of good faith and

11

fair dealing, those claims must fail. “[A]n action in tort for breach of the covenant arises only

12

in rare and exceptional cases when there is a special relationship between the victim and

13

tortfeasor.” Ins. Co. of the W. v. Gibson Tile Co., Inc., 134 P.3d 698, 702 (Nev. 2006) (internal

14

quotations omitted). “A special relationship is characterized by elements of public interest,

15

adhesion, and fiduciary responsibility.” (Id.) (internal quotations omitted). Nevada law,

16

however, does not recognize a fiduciary relationship between a borrower and a lender. See

17

Giles v. Gen. Motors Acceptance Corp., 494 F.3d 865, 882 (9th Cir. 2007) (noting the Nevada

18

Supreme Court would not recognize a fiduciary relationship as a matter of law between a lender

19

and borrower). Accordingly, to the extent Plaintiff’s claim for breach of the implied covenant

20

of good faith and fair dealing sounds in tort, the Court grants Nationstar and CitiMortgage

21

summary judgment on this claim.

22

Regarding Plaintiff’s claim against Nationstar for contractual breach of the implied

23

covenant of good faith and fair dealing, Plaintiff has not put forward sufficient evidence to

24

entitle her to a directed verdict. Whether a party has acted in good faith is a question of fact.

25

Consol. Generator-Nevada, Inc., 971 P.2d at 1256. As with Plaintiff’s claim for breach of

Page 14 of 20

1

contract, neither party has presented any law indicating that Nationstar’s inaccurate demand for

2

payment does or does not constitute a material breach of the covenant of good faith and fair

3

dealing as a matter of law. Therefore, a genuine issue of material fact remains regarding

4

whether Nationstar’s “excessive” demand breached the covenant. Accordingly, the Court

5

denies Plaintiff and Nationstar summary judgment this claim.

6

E. Intentional Interference with Contractual Relations

7

To prevail on a tortious interference claim in Nevada, a plaintiff must establish: (1) a

8

valid and existing contract, (2) the defendant’s knowledge of the contract, (3) intentional acts

9

intended or designed to disrupt the contractual relationship, (4) actual disruption of the contract,

10

and (5) resulting damage. See J.J. Industries, LLC v. Bennett, 71 P.3d 1264, 1267 (Nev. 2003).

11

Regarding the third element, the defendant’s “mere knowledge of the contract is insufficient to

12

establish that the defendant intended or designed to disrupt the plaintiff’s contractual

13

relationship; instead, the plaintiff must demonstrate that the defendant intended to induce the

14

other party to breach the contract with the plaintiff.” Id. at 1268.
In her Amended Complaint, Plaintiff alleges that “Nationstar’s excessive payment

15
16

demand was a breach of the LMA[] and was an intentional act designed to disrupt the

17

contractual relationship established between Plaintiff [and CitiMortgage] under the LMA.”

18

(Am. Complaint ¶ 62, ECF No. 1-4.) However, the Court finds that Plaintiff has failed to

19

sufficiently establish that Nationstar intentionally disrupted the LMA by sending the demand

20

letters.

21

Plaintiff has not produced any evidence that Nationstar intentionally disrupted the LMA.

22

Plaintiff’s Amended Complaint contains only the conclusory statement cited in the preceding

23

paragraph, and Plaintiff’s motion merely argues that Nationstar knew of the LMA and admitted

24

that the amount sought in the demand letters was wrong before again conclusively stating that

25

she is therefore entitled to summary judgment. Merely knowing of the existence of a contract,

Page 15 of 20

1

however, is insufficient to establish intent to disrupt a contractual relationship. J.J. Industries,

2

LLC, 71 P.3d at 1268. Moreover, Nationstar’s nearly immediate communications with Plaintiff

3

that the amount sought in the demand letters was wrong show that Nationstar did not intend to

4

disrupt the LMA. (Aff. of Pl. ¶ 6, Pl.’s MPSJ, ECF No. 68) (stating that Nationstar’s agent told

5

Plaintiff the amount sought in the demand letter was incorrect); (Billing Statements, Ex. 3 to

6

Pl.’s MPSJ, ECF No. 68) (showing the differed principal amount and seeking only $852.37 in

7

monthly payments). Therefore, Plaintiff has failed to establish her claim for intentional

8

interference with contractual relations or show that there is any genuine issue of material fact

9

for this claim.

10
11
12
13

Accordingly, the Court grants Nationstar summary judgment and denies summary
judgment to Plaintiff on this claim.
F. Fraudulent Misrepresentation
To state a claim for fraud or intentional misrepresentation, a plaintiff must allege three

14

factors: (1) a false representation by the defendant that is made with either knowledge or belief

15

that it is false or without sufficient foundation; (2) an intent to induce another’s reliance; and

16

(3) damages that result from this reliance. See Nelson v. Heer, 163 P.3d 420, 426 (Nev. 2007).

17

A claim of “fraud or mistake” must be alleged “with particularity.” FED. R. CIV. P. 9(b). A

18

complaint alleging fraud or mistake must include allegations of the time, place, and specific

19

content of the alleged false representations and the identities of the parties involved. See Swartz

20

v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007).

21

“A defendant may also be found liable for misrepresentation even when the defendant

22

does not make an express misrepresentation, but instead makes a representation which is

23

misleading because it partially suppresses or conceals information.” Blanchard v. Blanchard,

24

839 P.2d 1320, 1322 (Nev. 1992) (quoting Epperson v. Roloff, 719 P.2d 799, 803 (Nev. 1986)).

25

There are five essential elements to a claim for fraudulent concealment under Nevada law:

Page 16 of 20

1
2
3
4
5
6

(1) The defendant concealed or suppressed a material fact;
(2) The defendant was under a duty to disclose the fact to the plaintiff;
(3) The defendant intentionally concealed or suppressed the fact with the intent to
defraud the plaintiff; that is, the defendant concealed or suppressed the fact for the
purpose of inducing the plaintiff to act differently than she would if she knew the fact;
(4) The plaintiff was unaware of the fact and would have differently if she had known of
the concealed or suppressed fact;
(5) And, as a result of the concealment or suppression of the fact, the plaintiff sustained
damages.

7

Dow Chem. Co. v. Mahlum, 970 P.2d 98, 110 (Nev. 1998), overruled in part on other grounds

8

by GES, Inc. v. Corbitt, 21 P.3d 11, 15 (Nev. 2001).

9

The fraudulent representations alleged by Plaintiff are that CitiMortgage “omitted the

10

material fact that [it] was about to sell [Plaintiff’s] mortgage loan off to Nationstar” at the time

11

the LMA was executed and that Nationstar “fraudulently misrepresented a material fact by

12

stating that [Plaintiff] was required to pay $47,829” in its demand letters. (Am. Complaint ¶¶

13

65, 67, ECF No. 1-4.) The undisputed facts, however, show that Plaintiff has failed to

14

sufficiently establish multiple essential elements for each of her fraud claims.

15

First, regarding Plaintiff’s claim against Nationstar that the demand letters with incorrect

16

payment amounts were a fraudulent misrepresentation, Plaintiff has failed to establish intent to

17

induce reliance or reliance that resulted in damages. The undisputed facts show that

18

immediately after Plaintiff received the first inaccurate demand letter, she spoke with an agent

19

of Nationstar who informed her that the demand letter was incorrect and that she should pay the

20

amount due under the LMA. (Aff. of Pl. ¶ 6, Pl.’s MPSJ, ECF No. 68.) Likewise, at around the

21

same time she received the demand letter, Plaintiff also received a monthly billing statement

22

from Nationstar indicating that her amounts due each month were $852.37. (Billing Statements,

23

Ex. 3 to Pl.’s MPSJ, ECF No. 68.) These almost immediate corrections of the inaccurate

24

demand letter show that Nationstar was not intending to have Plaintiff rely on the inaccurate

25

demand letters. Moreover, Plaintiff never actually relied on the payment amount in the demand

Page 17 of 20

1

letters because she never submitted any payment to Nationstar on her loan. (Nationstar MSJ

2

4:8, ECF No. 77.) Therefore, she cannot show that she suffered damages because of her

3

reliance on the incorrect demand letters. As a result, Plaintiff has failed to establish her claim

4

for fraudulent misrepresentation or show that there is any genuine issue of material fact for this

5

claim.
Regarding Plaintiff’s claim against CitiMortgage that it omitted the material fact at the

6
7

time the LMA was executed that it was about to sell Plaintiff’s loan, Plaintiff has failed to

8

establish that the fact was material, that CitiMortgage was under a duty to disclose this fact,

9

that it intended to defraud Plaintiff, or that she would have acted differently had she known of

10

the prospective sale. Plaintiff’s Amended Complaint fails to even allege these elements beyond

11

the conclusory statements that “CitiMortgage[‘s] agent suppressed and omitted the material fact

12

that [it] was about to sell her mortgage loan” and that “Plaintiff detrimentally relied on the false

13

representation.” (Am. Complaint ¶¶ 65, 66, ECF No. 1-4.) Therefore, she has failed to

14

establish her claim for fraudulent concealment or show there is any genuine issue of material

15

fact for this claim.

16
17

Accordingly, the Court grants Nationstar and CitiMortgage summary judgment on
Plaintiff’s fraudulent misrepresentation claims.11

18

G. Negligence Per Se
“A claim for negligence in Nevada requires that the plaintiff satisfy four elements: (1) an

19
20

existing duty of care, (2) breach, (3) legal causation, and (4) damages.” Turner v. Mandalay

21

Sports Entm’t, LLC, 180 P.3d 1172, 1175 (Nev. 2008). A violation of a statute that constitutes

22

negligence per se, “establishes the duty and breach elements of negligence.” Ashwood v. Clark

23
24
11

25

As with her statutory claims, Plaintiff appears to concede that Nationstar and CitiMortgage should be granted
summary judgment on her fraudulent misrepresentation claims because she does not refute the arguments of
either defendant on these claims in either of her response briefs to their motions. See (Pl.’s Resp. to Nationstar’s
MSJ, ECF No. 87); (Pl.’s Resp. to CitiMortgage’s MTD, ECF No. 91.)

Page 18 of 20

1

Cnty., 930 P.2d 740, 744 (Nev. 1997). However, the violation of a statute only constitutes

2

negligence per se “if the injured party belongs to the class of persons that the statute was

3

intended to protect, and the injury suffered is of the type the statute was intended to prevent.

4

Vega v. E. Courtyard Associates, 24 P.3d 219, 221 (Nev. 2001).

5

The two statutes that Plaintiff alleges have been violated in her negligence per se claim

6

are Nevada Revised Statutes § 205.372 and § 107.080. (Am. Complaint ¶¶ 69-72, ECF No. 1-

7

4.) As the Court has already found that Plaintiff’s claims for violations of these statutes fail,

8

her negligence per se claim must also fail. See supra Sections III.A., III.C.12 Accordingly, the

9

Court grants Nationstar and CitiMortgage summary judgment on this claim.13

10

IV.

IT IS HEREBY ORDERED that Plaintiff’s Motion for Partial Summary Judgment

11
12

CONCLUSION

(ECF No. 68) is DENIED.
IT IS FURTHER ORDERED that Nationstar and Fannie Mae’s Motion for Summary

13
14

Judgment (ECF No. 85) is GRANTED in part and DENIED in part. Nationstar is granted

15

summary judgment on Plaintiff’s claims for statutorily defective foreclosure, violation of

16

Nevada Revised Statutes § 205.372, tortious breach of the implied covenant of good faith and

17

fair dealing, intentional interference with contractual relations, fraudulent misrepresentation,

18

and negligence per se. Plaintiff’s surviving claims against Nationstar are for breach of contract

19

and contractual breach of the implied covenant of good faith and fair dealing.

20
21
22
23

12

Again, Plaintiff appears to concede that she has no valid cause of action under either statute and therefore no
negligence per se claim because she does not refute the arguments of either Nationstar or CitiMortgage on these
claims in either of her response briefs to their motions. See (Pl.’s Resp. to Nationstar’s MSJ, ECF No. 87); (Pl.’s
Resp. to CitiMortgage’s MTD, ECF No. 91.)

24
13

25

The only claims Plaintiff alleges in her Amended Complaint against Defendant Cal-Western Reconveyance
Corporation (“Cal-Western”) are for statutorily defective foreclosure and negligence per se. See (Am. Complaint,
ECF No. 1-4.) Because the Court has found that both of these claims must fail as a matter of law, Cal-Western is
granted summary judgment on these claims.

Page 19 of 20

1

IT IS FURTHER ORDERED that CitiMortgage’s Motion to Dismiss (ECF No. 89) is

2

converted to a motion for summary judgment and GRANTED. CitiMortgage is granted

3

summary judgment on all of Plaintiff’s claims against it.

4

The Clerk of the Court shall enter judgment accordingly.

5

20
DATED this _____ day of August, 2014.

6
7
8

___________________________________
Gloria M. Navarro, Chief Judge
United States District Judge

9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

Page 20 of 20